Are Letters of Administration required to protect a personal representative from creditors when an intestate’s estate can only repay part of a debt?

Mr and Mrs made Wills appointing each other as sole executors and beneficiaries. Mrs died leaving a large debt and one bank account and the estate was not administered. Mr then died. Letters of Administration with Will were taken out by a nephew under intestacy rules and Mr’s estate was administered. Mrs’s debt now needs to be repaid. Her bank account will only cover part of the debt. No Grant is required to close the account and receive the proceeds.

Does the nephew have authority to act in repaying the debt without the Letters of Administration with Will or should the Nephew obtain Letters of Administration with Will for Mrs’s estate to protect himself personally from creditors? S27 Notices are going to be placed. The debt is to a private individual, an Acknowledgement of Debt was drawn up by solicitors and signed.

Jenny Dinsdale
Ellis Jones Solicitors

Does the nephew need to be involved at all?

As it is stated that the sole asset of the deceased was a bank account, which covers only part of the debt, might the nephew leave it to the creditor to seek a creditor’s grant?

In dealing with the surviving husband’s estate, the nephew will need to be aware of the potential for a retrospective severance of any assets formerly held as joint tenants by Mr & Mrs. I believe they will have 5 years from the date of death of Mrs to make the appropriate application, notwithstanding that such assets may already have been distributed by the nephew acting.

Accordingly, if there were joint assets passing on the death of Mrs by survivorship, the nephew could put himself in a position of significant conflict if he also sought a grant to deal with Mrs’ estate.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals